GAO says information-sharing reduces duty evasion

Tuesday, May 22, 2012

U.S. Customs and Border Protection should create a policy and a mechanism for sharing information among ports regarding the use of higher bond amounts to help prevent evasion of antidumping and countervailing (AD/CV) duties, the Government Accountability Office said last week.
To identify potential duty evasion, CBP targets suspicious import activity, analyzes trends in import data, and follows up on allegations from external sources, GAO said.
If CBP identifies a potential case, it can use various techniques to attempt to verify whether evasion is occurring, such as asking importers for further information, auditing records of importers suspected of evasion, and inspecting shipments arriving at ports of entry.
If evasion is confirmed, CBP can pursue the collection of evaded duties, impose civil penalties, seize merchandise or refer cases for criminal investigation. Between fiscal years 2007 to 2011, CBP assessed civil penalties totaling about $208 million against importers evading antidumping and countervailing duties.
GAO said CBP still faces a number of challenges in gathering evidence and taking action against duty evaders, including:

It also said CBP lacks information from the Commerce Department that would enable it to better plan its workload and help mitigate the administrative burden it faces in processing AD/CV duties, an effort that diminishes its resources available to address evasion.
Additionally, CBP has encouraged the use of larger bond amounts to protect AD/CV duty revenue from the risk of evasion, but CBP has neither a policy nor a mechanism in place for a port requiring a larger bond to share this information with other ports in case an importer withdraws its shipment and attempts to make entry at another port to avoid the higher bond amount.
GAO recommended the Commerce Department secretary work with the Homeland Security secretary to identify opportunities for Commerce to regularly provide CBP advance notice on liquidation instructions, and notify CBP when courts reach decisions on AD/CV duty cases in litigation.
It also said the Homeland Security secretary should direct CBP to create a policy and mechanism for sharing information among ports regarding the use of higher bond requirements.
In addition, CBP should systematically track and report on instances of AD/CV duty evasion and related data, and the results, such as enforcement outcomes, of allegations of evasion received from third parties. - Chris Dupin